A Fife construction company has been pushed to the brink of collapse as HMRC delay previously agreed furlough payments, it has been claimed.
Kirkcaldy-based RG Construction, a civil engineering firm with a workforce of 16, had chosen to furlough staff in April after HMRC confirmed to the company and its accountants that a furlough application was successful.
After administrative errors led to delays in payments from the tax office, company bosses approached Kirkcaldy and Cowdenbeath MP Neale Hanvey for support, and a formal complaint from him led to an assurance of a substantive response by July 15.
But in a turn of events that leaves RG Construction a staggering £64,800 out of pocket, HMRC’s legal services team has failed to provide a full response and instead referred the case to another department.
RG Construction has been covering employees’ salaries out of its own coffers, but bosses now say that the company will have to fold unless HMRC make the furlough payments this week.
Ron Greig, who owns RG Construction, said: “The impact on our business is silly due to the lack of clarity from HMRC.
“We were told that there is a reference number and that the claim was passed. At that time, we were due around £40k.
“So, because we had been paying our guys on the furlough scheme, we continued to do so instead of paying them off, meaning they didn’t have to go on Universal Credit.”
He said: “Due to being messed about by HMRC, our cashflow got hammered and my life has been hell.
“The bounce back loan thankfully came in and that bridged what had already gone on wages.
“But we hit bottom with our overdraft, and we have now been turned down for a loan.
“In five years, we’ve never had a problem and normally run in credit at the bank, but because of HMRC, we were rejected.
“Now my business is up against it and the UK Government may soon have another 16 people to support on welfare rather than having them out earning and paying taxes.”
Mr Hanvey said he was furious at what he described as the “glaring incompetence” of HMRC.
“We should be doing everything we can to retain jobs right now, but instead HMRC is putting more obstacles in the way,” he said.
“This is not the only issue with the furlough scheme that I’ve seen come through the office. I’m supporting other organisations who are out of pocket because of poor communication from HMRC.”
An HMRC spokesperson said it did not comment on “identifiable taxpayers or businesses” but did say: “The Coronavirus Job Retention Scheme has been delivered at unprecedented pace and is protecting thousands of jobs up and down the country, and has seen 1.2 million employers apply to help to pay the wages of around 9.4 million furloughed jobs.
“Our guidance is clear on the requirements for the scheme, which include notifying HMRC on an RTI submission on or before March 19 2020. This must relate to a payment of earnings in the 19/20 tax year.
“But if an employer believes there have been mistakes or unreasonable delays with their application caused by HMRC they should follow our complaints process which can be found on the gov.uk website.”
